Text Boyd Farrow
Our round-up of what’s happening in the business world across Europe
RADAR
Supermarket sweepski
In a once unimaginable move, Wal-Mart – the world’s largest retailer – may be expanding into Russia. The US giant could march into the Russian market within two years – as a joint venture or acquisition – to capitalise on a swelling economy and a dearth of competitors, according to a report by the bank UBS.
The economy in Russia, the world’s biggest exporter of crude oil and natural gas, is expanding for the 10th consecutive year and, unlike most of Europe and the US, supermarkets in Russia generate less than a third of retail sales.
Russia was singled out as a potential market by Wal-Mart’s chief executive officer H Lee Scott last October. The country’s €98bn food retail industry accounts for almost half of total spending and is tipped to expand around 17% annually through 2010 as salaries rise.
Russia’s economy grew 7.6% in 2007, the Economy Ministry said recently. According to the 2007 International Retailers’ Survey, Moscow and St Petersburg are drawing more expansion interest from retailers than any other cities in the world. Paris-based Carrefour, Europe’s biggest food retailer, aims to open its first Russian stores this year.
Why are we here?
Shopping in Warsaw
Poland’s new government seems hellbent on speeding up privatisation, with more than 300 state-owned companies slated to be sold in 2008-2009. Priorities include businesses in the agriculture, furniture and tourism sectors, in which the Treasury holds stakes it doesn’t need.
The largest of the companies on the block are in the power sector. Preparations for the privatisation of Enea and Polska Grupa Energetyczna are well advanced. Defence sector companies, such as Gamrat and Huta Stalowa Wola, will also be privatised, as will press distributor Ruch and Rzeczpospolita, a government-owned publishing company.
The national air carrier LOT Polish Airways, of which the government holds almost 68%, will be fully privatised, as will PKO BP, Poland’s largest retail bank. Even the Warsaw Stock Exchange has been earmarked for privatisation: the government will retain a 51% stake but, yep, you guessed it: a sizeable chunk of the stock in the stock exchange is set to be sold via a public offering.
BUZZING ABOUT…
Space travel
This year will be ‘the year of the spaceship’ according to Sir Richard Branson, whose Virgin Galactic recently unveiled its new SpaceShipTwo. The spacecraft will ferry tourists to the edge of space on the back of a four-engine plane – WhiteKnightTwo – before burning nitrous oxide and rubber-based fuel to prolong the trip.
Branson isn’t the only one hoping to boldly go into the history books. Barcelona-based Galactic Suite is offering astronaut training for trips into space and holidays aboard its envisaged orbital Space Resort. Anyone with €3m can buy 18 weeks’ preparation on a Caribbean island, the journey into space and three nights’ accommodation in the orbital hotel.
A cheaper and more immediate option for would-be space cadets comes courtesy of GAP Adventures, which has just launched its Edge of Earth trip. The package costs €18,000 and includes a trip from Moscow to the launch city of Nizhniy Novgorod, followed by a flight in a MiG-31 jet fighter to 18,300 metres, known officially as near space. Travellers must book 45 days in advance for security clearance and pass a physical. Although travellers have to make their own way to Moscow, the price includes some meals and luxury hotels – on Earth. www.gapadventures.com
DRAWING BOARD
Soho far, Soho good
The British clothing billionaire Richard Caring – who owns top London restaurants including The Ivy, Annabel’s and Le Caprice – has clinched a €140m deal to buy a majority stake in Soho House, the capital’s fashionable private-members’ club group. As part of the transaction, bank HBOS has provided a €175m credit facility to help turn Soho House into a global chain.
Under the club’s founder, Nick Jones – who will stay on as chief executive – Soho House replicated its concept in New York and opened several outposts in London and a country house hotel in Somerset. The takeover will finance the launch of clubs in Istanbul, Tokyo, Shanghai, Cairo and Sydney.
Firstly though, according to Jones, work will begin this year on Berlin House – a hotel and club in Prenzlauer Berg, while its first Bed & Brasserie will open in London’s Soho. Clubs in Miami and Chicago are set to open in 2009.
Not really…
Just for kids
Forget Led Zeppelin’s megabucks comeback; TV and film producers and merchandisers are rubbing their hands together as the Smurfs embark on their 50th birthday celebrations.
Created by the late Brussels-born cartoonist Pierre Culliford, known as Peyo, the tiny blue toadstool-dwellers made their debut in a comic strip in October 1958. A Hanna-Barbera animated TV spin-off in 1981 and a hit record, The Smurf Song, turned Peyo’s characters into a worldwide brand.
Peyo’s son Thierry is now planning a slew of Smurf projects, including a 3D animation movie, new comic books, the remastering of the TV series for DVD and computer games, through the slightly sinister-sounding International Merchandising, Promotion & Services (IMPS), which controls the Smurf brand. Meanwhile, Peyo’s widow and two children have just kicked off a European birthday tour in Brussels, which will continue in Paris and Berlin this month. The Smurfs will also reunite with UNICEF to promote children’s rights and education.
Thierry Culliford says many who grew up watching the Smurfs during the 1980s want to introduce them to their own children. Sounds like we’ll soon all be singing The Smurf Song again until we’re blue in the face.
Upgrade your trip
Dopplr
Dopplr, an online network for frequent travellers, is being talked about as this year’s Facebook. The networking site allows business people to share their travel plans with contacts, reminds them about colleagues who live in the places they’re visiting and alerts them when business contacts arrive in their city.
“We’re against lonely travel,” says Dopplr co-founder Lisa Sounio, who hatched the idea after getting fed up with bad scheduling with colleagues when working in Helsinki. “We found we were travelling from conference to conference, spending weeks trying to get together,” she explains. “Only later would we find out we’d been in the same city.”
Anyone can join Dopplr by plugging in their travel itineraries, but permission to view another member’s itinerary is by invitation only. Dopplr has steered clear of advertising, believing that the site will make money through premium services for large global companies needing to track the movements of thousands of employees. Those companies could use Dopplr to plan meetings around board members’ travel or to schedule appointments with clients when they cross paths with employees. www.dopplr.com
DESIGNS ON BUSINESS
Work, sweat and play
Anyone whose work takes them to St Petersburg during the next couple of months will enjoy the city’s traditional seasonal delights. The snow will finally have melted and it’ll be easy to whizz around the art collections of the State Hermitage Museum – the former residence of the Tsars – ahead of the summer crowds.
This spring there’s another reason to get excited. In April, Finland’s Sokotel Group fully opens the city’s first five-star spa hotel, Holiday Club St Petersburg, on Vasilievsky Island. The hotel has 278 guest rooms, seven restaurants, three saunas and eight meeting rooms, the largest of which can accommodate more than 300 people.
Sokotel has also recently opened two four-star hotels in St Petersburg – Sokos Hotel Vasilievsky and Sokos Hotel Olympic Garden, the latter boasting 348 guest rooms and 13 meeting rooms. Clearly this city means business. holidayclub.fi
GROWING GAINS
Swiss Army advances
With its collapsible blades, tweezers and that pointy thing for removing stones from horses’ shoes, the Swiss Army knife was once considered indispensable for travellers. Recently it has been squeezed out of many pockets by mobile phones and iPods, not to mention tighter security policies. When airlines banned blades in cabins, sales of the knives – which were often bought at airports – fell by a third.
Now the iconic brand is making a comeback. Victorinox, one of the knife’s two manufacturers (it bought the other, Wenger, in 2005) has been playing up its heritage to broaden its portfolio.
Victorinox has extended into luggage, leather goods, clothing and watches, all sporting the famous logo, while the classic knives have been updated to include pressurised ballpoint pens, laser pointers and USB memory drives.
Sales rose 5% in 2007, according to Victorinox chief Carl Elsener IV. His great-grandfather started the company in 1884 – Victoria was his mother’s name, while ‘inox’ is a term for stainless steel. The knives are still supplied to many national armies and NASA, as well as legions of fans worldwide.
Around 1,000 workers make 28,000 knives a day at Schwyz, an hour’s drive from Zurich.
Traffic report
Art of capitalism
Want to do business in Copenhagen? Then loosen your tie. Denmark’s government has allocated DK90m (€12m) to strengthen the links between the country’s business and cultural communities.
Around DK25m (€3.35m) will be spent this summer to create a Centre for Culture and Experience Economy in Roskilde to “strengthen the cultural sectors’ business competences”. It will teach creative types how to make more money for themselves – and for the Danish economy. Funds will be allocated to a diverse range of cultural projects, and to the creation of “business-oriented experience zones”. The Danish Ministry of Culture says these zones will focus on computer games, fashion, architecture and design, and food culture.
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